ACS settles fraud charges

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Affiliated Computer Services (ACS) agreed last week to pay the federal government $2.6 million to resolve allegations that it had submitted inflated charges for services it provided via programs run by and through the Agriculture, Labor, and Health and Human Services departments, according to the Justice Department.

The settlement follows an investigation of civil fraud allegations under the False Claims Act.

ACS voluntarily told the government that it had submitted inflated claims to a local agency that delivered services to workers using funds provided by the three federal departments, according to Justice and the company.

The company worked closely with Justice to investigate the matter, according to the department and ACS. The vendor said it had fired four employees after detecting misconduct related to the overbilling.

The civil fraud allegations centered around ACS’ work on behalf of the Dallas County Local Workforce Development Board, according to a Justice statement that provided details about the case.

The board, which operates workforce development centers, received funds from the three federal departments via the Texas Workforce Commission to enroll citizens in various programs. ACS provided enrollment services and received compensation, including profit and incentive payments based on the number of clients enrolled.

ACS said several former employees had inflated the payments it received from the board.

“ACS cooperated fully with the government’s investigation, and based on information learned during the investigation and from ACS, the U.S. alleged ACS was paid federal funds for inflated or otherwise improper profit- and incentive-related information between 2002 and 2005,” according to the Justice statement.

According to an ACS statement, “After an internal investigation revealed that employees in our Dallas workforce program were not upholding our high standards on this contract, we immediately notified the authorities.”

ACS called the settlement fair. The vendor added that the workforce board had agreed to pay $539,472 as final payment for the 2005 contract year.

The three departments’ inspector general offices worked with the workforce commission and U.S. Attorney’s Office for the Northern District of Texas to investigate and resolve the matter.

False claims investigations can lead to the award of treble damages to people who alert the government to fraud schemes. Justice has mounted several successful investigations and prosecutions of cases related to computer and telecommunications programs.